Wanted: Borders CEO -- Again

The big news this week is the sudden departure of Ron Marshall from Borders, which leaves the struggling bookseller forced to find another chief executive for the fourth time in five years.

When Marshall arrived at Borders last January, he was billed as a “turnaround expert.” But so far as I can tell, he did little to turn the chain around. Sure, he is credited with spearheading operational improvements (read: cost cuts) to drive increased cash flow and reduce debt. But cost-cutting, as many retailers are sure to learn in the coming months, can only get a chain so far. Marshall seemed to have a blind eye when it came to improving or defining the Borders brand and in-store experience. Improving a company’s cash flow without giving equal attention to improving its traffic flow is folly in the long run. Look at the numbers: Borders has reported three consecutive quarterly losses, and crucial holiday same-store sales dropped 14.6%.

On a macro-level, Borders’ struggle is indicative of a trend that has befallen Circuit City and other big-box specialty retailers: In today’s super-competitive environment where shoppers have so many shopping choices, there may only be room for one national brick-and-mortar big-box player in any particular category. Barnes & Noble has outplayed Borders in nearly every way. Sure, it’s had some rough sailing during the recession. But it is a rock of stability compared with Borders.

As for Ron Marshall, amazingly, he has already landed a new gig: He will report to duty as CEO of the Great Atlantic & Pacific Tea Co. (A&P) on Feb. 8. In some ways, he is jumping from the frying pan into the fire. The supermarket operator has been losing money since June 2008.